AARP
Future employment policies for older workers will have to boost the employment rate and guarantee stable and appropriate job opportunities.

Current conditions for older workers

In the past, most OECD nations encouraged early retirement in order to solve issues concerning the younger generation and unemployment .However, since the mid-1990s, decline of the social security system due to a low national birthrate and an aging society, along with a slowdown of economic growth, have led to pension reform and implementation of various employment policies to promote opportunities for the older workforce.

Interestingly, the employment rate for older Korean workers is already high. The employment rate for workers who are 50–64 years old is 69.9 percent, and the rate for workers ages 65-plus is 33.8 percent. (see figure1.) Also, the proportion of 50-plus workers is consistently increasing. Furthermore, the employment rate for older workers continued to increase in recent years, so this growth trend is projected to continue.

Figure 1: Employment Rate by Age Group in Korea (2000–2014)

Park_Figure1.jpg

Source: National Statistical Office “Labor Market Activities Population Study.”

From a comparative perspective, the employment rate for older Korean workers is higher than other OECD nations. (Refer to figure 2.) Specifically, the employment rate for workers ages 55–64 is eighth highest, and the rate for workers ages 65-plus is the highest among the OECD nations.

Because the official retirement age in Korea is 71 years old, Korean workers stay employed the longest. Therefore, considering the employment rate aspect, Korea‘s condition is not as serious as other OECD nations.

Figure 2: Employment Rate of Older Workers in OECD Nations (2013)

 

Park_Figure2.jpg

Source: OECD Stat.

 

However, the quality of employment is lacking in Korea. Only 7.6 percent of people retire at the official retirement age, and the average age of retirement is 53 years old. Thus, most of the older workers experience employment instability at their lifelong career workplace. As a result, the reason behind the high employment rate for older workers is not due to a lifelong career, but rather the likelihood of reemployment or self-employment.

The question becomes, do older workers continue to work because they have a positive work condition? The reality says no. The negative stereotypes toward older workers, lack of employment services such as job change support or job training, and insufficient information make it hard for older people to be reemployed, and even if they do find employment, most of the working conditions are poor. In case of reemployment, the average salary is about one-third of long-term employed workers, and the employment status is temporary, hourly work, or self-employed in small-scale business.. The job distribution of 55- through 79-year-old workers shows that simple labor workers make up 27.6 percent of the workforce, functional machine operation workers make up 20.3 percent, and the farming/fishing pool of skilled workers makes up 19.7 percent. This means that 67.6 percent of older workers engage in relatively simple work. On the other hand, only 12.8 percent of older workers are managers, experts, and clerks. Furthermore, only 6.6 percent of workers aged 65–79 are in high ranking positions, versus 37.7 percent for workers aged 15-plus. (Refer to table 1.) This clearly shows that the reemployment of older workers does not make use of their experience and know-how.

Nonetheless, 59.9 percent of older workers (55–79 years old) wish to stay employed, and 74.3 percent of older men want to continue working. Among reasons to continue working,54.8 percent of respondents cite economic needs (supplementary income). As a result, older workers leave the employment market at 71 years old when the official retirement age is only 53, making them spend 18 of their golden years with a low wage and an instable labor status. This certainly is a waste of human capital on a personal level, and more importantly, not advisable on a national level due to inappropriate utilization of elite manpower.

Table 1. Job Distribution

Occupation

May 2012

May 2013

Occupation

Employment Rate: Aged 55–79

Employment Rate:

All Persons(15+)1)

Employment Rate:

Aged 55–79

Employment Rate:

Aged 55–64

Employment Rate:

Aged 65–79

Employment Rate:

All Persons(15+)1

Senior officials, managers and professionals

8.7%

21.2%

8.4%

10.3%

4.7%

21.1%

Clerks

3.9%

16.3%

4.4%

5.7%

1.9%

16.6%

Service workers, shop, and sales workers

19.8%

22.2%

19.6%

22.6%

13.6%

22.0%

Skilled agricultural and fishery workers

20.5%

6.5%

19.7%

11.9%

35.1%

6.3%

Plant and machine operators and assemblers

19.6%

20.6%

20.3%

25.4%

10.2%

20.7%

Low skill workers

27.5%

13.2%

27.6%

24.1%

34.5%

13.3%

Total

100%

100%

100%

100%

100%

100%

1.Distribution is based on workers who are ages 15 and older.

Source: National Statistical Office, “Result on Labor Market Activities Population Study Younger & Older Generation Supplementary Study.”

The quality of employment for older workers should be improved, because the national pension system was just introduced, and the social security system is not well designed.

Challenges

The Korean government recognizes the employment problem for age 50-plus workers. To address employment instability, poor conditions of reemployment, and concerns for old age, the government has implemented six policies. 1) The government supports older workers who wish to remain in their original workplace. The most representative case is supporting the wage system and reorganizing personnel systems to establish the official retirement age at 60 years and older.  For example, if an employer takes the salary peak system, government support limit will be increased, and consulting services for restructuring wage system (duty and performance-based) will be provided.

Also, in an effort to solve the employment instability issue, we can expect to see more diversified employment statuses for older workers to help them continue on their original job and support for corporations to maximize their manpower utilization. As an example of this cooperative effort, some companies have implemented a human resource exchange program between large and small corporations. Employees from the bigger corporations work in smaller corporations to support management and technology areas with their experience and skills.

Active aged workers, and rewarding old age with vitality

-Customized Employment Measures for older workers by stages

Table 2.Progress Plan

Type

Employment Condition

Challenges

Lifetime job preparation

Lack of career evaluation and lifetime planning

Implementation of lifetime career planning program

Absence of career change service upon retiring

Support for to-be retirees

Insufficient participation such as vocational capacity improvement training

Improvement of lifetime vocational capacity

Work

Early retirement in early-50s

Postponement of retirement age and restructuring of wage and personnel system

Employment instability for main job

Improving employment stability through diversification of employment status

Reemployment

Lack of job opportunities for disadvantaged employment groups

Expansion of job creation and internship opportunities

Lack of job to make use of accumulated experience and skill

Expansion of support programs for professional manpower

Increasing micro start-up business as a means of living

Switching to paid workers and supporting start-up of socio-economical business

Retirement

Lack of social activity opportunities

Expansion of social contributive activity opportunities

Low income older workers’ concern for livelihood

Expansion and efficiency of Financial Support Program for Job Creation

Insufficient retirement income

Improving policies for retirement pension and national pension

Reinforcing infrastructure

High industrial accident rate, neglected health management

Creating age-friendly and safe working environment

Insufficient infrastructure like special agencies

Expansion of employment supporting agencies for older adults

Lack of awareness of employing older workers

Improving perceptions of employing older workers

Source: Ministry of Employment and Labor (2014).

2) To address the issue of older workers finding themselves in poor working conditions after reemployment, the government has instituted customized employment support that considers the characteristics of job seekers. Job opportunities have been consistently expanded for older job seekers and retired professionals, who have difficulties finding a new job. At the same time, employment training has been provided for disadvantaged employment groups (utilizing training facilities of large corporations, colleges, and private training centers). Furthermore, to help older professionals obtain reemployment, job centers targeting older job seekers, classified by industry, will be built to include an employment support system and expand internship opportunities.

3) Most older workers retire without the proper preparation, lifetime career planning, skills training, or career change services. This is necessary to help older adults prepare for the later part of their lives, considering today’s extended life expectancy. Private professional agencies provide programs free of charge and match employers with older workers who have the right capabilities and experience. Furthermore, to help future retirees prepare for actual retirement, the career change support system will be built along with specialized training programs to improve vocational capability.

4) Financial Support Program for Job Creation support jobs and other job opportunities for disadvantaged workers, including low income older adults, will be expanded. Not only will the number of job opportunities increase, but so will wages and working periods. Jobs that go beyond simple labor will be created, such as socially valuable and age-appropriate jobs, to enhance life quality and tackle the challenges that communities face.

5) The government will provide a budgetary incentive for employers to improve their facilities and equipment to be more age-friendly and prevent industrial accidents and maintain productivity. This initiative promotes a healthy working environment to reinforce health and safety management for older workers.

6) As a means of solving problems such as an aging and economically inactive population, much effort is being made to improve the public’s perceptions of older adults. A nationwide campaign is being promoted to increase awareness and change how people view older adults: from simply retired and removed from the market to active, skilled, and highly experienced members of the workforce.

The Korean government recognizes the importance of implementing various employment policies targeting older adults, a necessity in an aging population. Most importantly, the working conditions that older adults often face upon reemployment cannot be overlooked. Future employment policies for older workers will have to boost the employment rate and guarantee stable and appropriate job opportunities. The government will also have to work hard to improve society’s perception about older adults as the social demographic changes.

 

about the author

Yong Ju Park is the Chairman of the Human Resource Development Institute

Mr. Park received his BA in Economics from Sunggyungwan University in 1981, MA in Health Economics from from University of Michigan in 1997, and PhD in Health Promotion from Korea National Sport University in 2003.Mr. Park began his career in National Solok-do Hospital Welfare team, as a Ministry of Health and Welfare Medicinal Policies administrative officer from 1981 to1993.

From 1993 to 2002, he served many different positions to direct various projects. He was appointed as a- Ministry of Health and Welfare Disease control manager, a Health Promotion Manager; a Health Industry Policies Manager; a National Institute of Health Training Manager; and an Oriental Medicine System Director.

From 2002 to 2009, he also served in the U.S. Embassy as a Councilor, as a Basic Senior Pension T/F Leader, a Director General for Pension Policy, and a Public Information Officer in Ministry of Health and Welfare. He then served as a Low Birth-rate and Aging Society Policies Director from 2010 to 2012.

Mr. Park received a Presidential Citation in 1987, and a Complimentary Award in 2009.

 
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